IoT, a New Reality for Insurers

IoT, a New Reality for Insurers - AZLogica

AZLOGICA® launches a solution plan to empower the insurance sector. The preventive confinement has been accelerating the digital transformation of the insurance sector, putting it on high alert not to lose its competitiveness. Insurers have had to make rapid decisions, especially in sensitive areas like health, where several insurers have introduced coverage plans during the pandemic, some for a lifetime, others for a fixed term, likely with increased rates compared to those before the emergency.

Amid the COVID-19 emergency, insurance companies have recognized the urgency of leveraging technology to provide practical solutions as users remain at home. Some companies are already turning to digital platforms to streamline the purchase and sale processes for vehicle insurance. The automotive sector, in particular, has been a major concern for insurers due to the perceived usefulness of their policies. Policyholders question the need for insurance covering the risk of traffic accidents while their vehicles are “confined.” Insurers have had to carefully evaluate this situation to find a model that adapts to this reality.

According to a recent report from the American Association of Retired Persons (AARP), with people at home and away from roads, many well-known insurers in the United States and other countries have decided to offer partial premium refunds during different periods or suspend cancellations for non-payment and late payment charges.

The challenge for these companies is to enhance their offerings for both current and future policyholders, whether individuals or businesses. While the pandemic has affected every aspect of the economy, insurers must be able to offer more dynamic insurance policies, providing increased protection against risks and designed to navigate an uncertain future post-crisis.

In a recent article on the subject published by Portafolio magazine, some companies have developed “a system that allows people to quote, compare options, complete forms, sign documents, perform vehicle inspections, finance the policy, and pay 100% digitally, without third-party intermediaries.”

Thus, digital transformation, especially the Internet of Things (IoT), becomes a tool of greater relevance in the insurance sector, thanks to its ability to flexible offerings, adapt to changing circumstances, and minimize risks.

For AZLOGICA®, proximity to the insurance world is not new. For over seven years, it has provided technological support to the sector, assisting clients such as ALLIANZ, AXA, and the Colombian Federation of Insurers (Fasecolda), as well as other companies of various sizes and origins, all equally important in the industry. Within the operations of these companies, AZLOGICA® plays a role that encompasses not only the company itself but also reaches other actors in the process, such as intermediaries and insurance brokers like AON and PROMOTORA DE LA SABANA, supporting the technification of risk management through IoT solutions.

Given this experience, and amidst these challenges, AZLOGICA® has structured a portfolio of solutions aimed at various insurance branches, particularly those associated with automobiles and transportation. These solutions focus on the stages of the underwriting process, emphasizing speed and robustness in technological adaptation for change.

The solution package specifically allows risk minimization, establishing efficiency parameters, regulatory control, detection of patterns associated with the behavior of different types of transport, online inspections, and data visualization, among other features.

This is the portfolio that AZLOGICA® has designed to enhance these insurance services:

IoT System for Usage-Based Insurance:

With the Pay As You Drive® platform, dedicated to Automobiles, Transportation, SOAT, and even General Insurance, can be assessed based on the degree of exposure to real risk, measured with telematics, GPRS-GPS devices, and actuarial exposure and consumption processing and analysis.

AZLOGICA®’s solution allows all the variables that each insurer profiles to be parameterized, providing real-time exposure levels that automatically establish the rates for each coverage. This ensures that both the insurer and the insured have a policy tailored to their actual exposure.

Online Registration and Management of Biosafety Protocols:

To comply with public health regulations amid the pandemic and potential future contingencies, each insured production process will have access to the configurable TEAM MANAGER® tool. This tool, accessible through smartphones, PDAs, and even ultra-low-range cellphones, facilitates the cross-functional control of regulation compliance. This helps reduce health risks and optimize resources.

Connectivity for Micro-Insurance, or Insurance for Alternative Means of Transportation:

With the rise of alternative means of transportation, such as bicycles and scooters, to reduce congestion during the current emergency, AZLOGICA® offers a tool that aligns these risks with pricing based on their exposure to risk. The tool measures usage habits, speeds, distances, zones, schedules, routes, and more. This allows offering micro-insurance policies associated with special transports.

Remote and Analytical Video for Online Inspections:

Platforms like THINGS MANAGER® and TEAM MANAGER® reduce response times to a minimum. Confidence increases, and the learning curve for critical events is dramatically reduced. This is possible through online inspections of remote scenarios, including pre-insurance inspections or inspections in case of accidents, which also allow experts to be virtually present at the location of the exposed risk or the incident.

Bespoke Solutions with Telemetry:

Specific situations aligned with the strategies and specific needs of each insurer find the most appropriate solution in world-class IoT. This is thanks to online visualization of structured and unstructured data and the generation of BIG DATA intersections. This enables risk analysis based on actuarial science, predictive analytics, artificial intelligence, and machine learning.

Each possibility presented by AZLOGICA® in this portfolio adapts to the needs of each insurer. These solutions allow for robust and specialized, non-mass but personalized, offerings, leveraging the primary asset: data, to its maximum potential. According to Wilson López, an actuarial expert associated with AZLOGICA® in this project, and recognized in the insurance sector, current data analysis based on technology-captured data allows for a more precise analysis. This leads, for example, to a reduction in mutualism in favor of more accurate expressions, thanks to better segmentation. This not only benefits the insurer but also enhances market security.

For AZLOGICA®, co-creating these tools with insurers, with world-class Information Security standards (ISO 27001), will optimize technological resources based on the knowledge and strategy of each insurer. This allows scalability, flexibility, maximizing market offerings, return on investment, and increasing policyholder loyalty. For more information, contact us at: aseguradoras@azlogica.com

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